<p>Like many others, our FAFSA EFC is double what I thought it would be. Since we paid off our mortgage, have some savings and a lot in IRA accounts, I am certain that our Profile EFC will put us into six figures. Either way, we are looking at loans whether dd goes to public Univ or private LAC.</p>
<p>My understanding is that (a) loans a student borrows do NOT reduce the family's EFC; and (b) loans the parent takes also do NOT reduce the EFC. Is this correct or does the new debt reduce the EFC for years 2-4? Thanks!</p>
<p>No, loans do not lower the efc. Because FAFSA does not look at home equity, it is better to have your money in that rather than sitting in a bank account. Profile does, though certain schools do give some exemptions for home equity. The best place for assets is in a qualifed pension plan or IRA since they do not count when they are there.</p>
<p>A I believe this is TRUE- student loans don't reduce parent EFC
B True, the loans don't reduce the EFC either, although there may be somewhere to deduct the interest that you are paying out, since parents loans generally require to be paid back immediately.
Our EFC has stayed pretty much the same for the past 3 years, although our expense has compounded- all the more reason to have financial safeties!</p>